Subscriptions are here to stay-here's how ecommerce businesses can leverage recurring payments
The market may be experiencing a downturn, but the subscription economy has never been stronger. Statistics show that we’re spending more than ever online, with the market expected to grow to $7.39 trillion by 2025.
Subscription ecommerce sales soared by 41% when brick-and-mortar stores closed during the pandemic—and the momentum hasn’t slowed down.
Today, there are millions of subscription services across every sector you can imagine, from food, music and TV to SaaS products and digital services. Gartner estimates that by 2023, 75% of direct-to-consumer brands will offer subscriptions to attract and retain customers.
What does that mean? Subscriptions are here to stay, and taking advantage of them is a huge opportunity to increase your revenue.
Whether you’re just getting started or looking to significantly scale recurring payments for your brand, here’s how to make subscriptions part of your long-term business growth strategy.
Subscriptions steady revenue and build a customer profile
Offering or scaling your subscription business creates a reliable stream of recurring revenue and lets you better forecast the future. But it also helps you understand more about your customers and keep them coming back with a personalized experience that feels unique to them.
● Valuable customer insights. By creating a virtuous cycle of gathering information, you can build valuable customer insights over time and use these to improve the buying experience. This will keep your customers happy.
● Personalized shopping. Use customer data to provide a personalized touch through tailored selections. With a platform like Swell, you can use built-in buying flows, like quizzes, to find out what customers want and give them a better way to select those products.
● Unique value propositions. If the price of a product is too high, you could be missing out on potential revenue. Offering a range of tiers and packages to provide value to customers at every price point can help you close the sale.
● Better inventory management. Accurately keep track of how many products your brand will sell in a given period, and avoid over-stocking or under-stocking and plan inventory efficiently.
● Customer loyalty. Consistently engaging your brand with customers deepens relationships and builds loyalty. Reward your customers with exclusive, members-only content and keep them coming back for more.
● Higher customer lifetime value. You can offset acquisition costs through repeat processes. Offering discounts on subscription purchases and still increasing CLV over single-purchase customers, is beneficial for your brand and the customer.
The right tech for endless flexibility
In a growing and competitive market, your subscription software needs to offer certain technical capabilities to get ahead of competitors and in front of new customers.
These technical capabilities include:
● Promos and discounts. Offering discounts or trial periods on your subscriptions is a great way to encourage new customers to sign up for regular shipments. You can also include cross-sells and upsells on product pages and checkout to increase subscription order value.
● Flexible payments and checkout. Customers want a seamless checkout experience and to be able to choose their preferred payment gateway. A customized checkout experience can help you improve conversion rates, and a variety of payment options broadens the scope of potential customers.
● Subscription management. Your software should allow a totally customized setup with custom schedule intervals (not just weekly, monthly and yearly options). Giving your customers the option to pause and resume themselves through the customer portal will also minimize cancellations.
● Personalization. Customers want to know what’s right for them, and they’re looking to you for guidance. Built-in quiz functionalities and memberships can help you learn more about your customers and offer tailored recommendations to keep them happy.
● Operational tools. Managing two separate dashboards for orders and subscriptions is cumbersome. Streamline the process with one ecommerce dashboard with built-in subscription functionality and a centralized source of truth for your inventory.
Scale and own your market with recurring payments
At Swell, we believe that your ecommerce tech should be scalable from the start.
Whether you’re looking to build a subscription model from the ground up or to scale your existing service, Swell’s flexible ecommerce platform can help you do that all from one powerful dashboard with built-in subscription features (no external apps necessary).
Spinn Coffee transformed their business through subscriptions. Using Swell, they built a membership option with free shipping synced to a marketplace of 400+ independent roasters, allowing them to grow and retain customers efficiently.